Closing Positions

Following the previous section on creating a position using either “Lend & Borrow” or “Trade” page for order submission and execution, closing a position on Infinity requires the opposing position to be created, where you are a (net) lender and would like to close your (net) lending position, you would enter a borrow order to close and “net” out your position to be flat (long = short).

For example, on 1st January you enter and execute a lending position on the floating rate market for a notional size of 1,000. Once executed, you receive the floating rate on the 1,000 notional size. In order to “unlend” and withdraw liquidity from the floating rate market, you would enter a borrow position of 1,000 notional size. Once this has been filled, your position in the floating rate market would be zero, or flat.

In order to close a position on a token, the order on the opposing side must be for the same token. For example, you have a 10 ETH lending position and enter a borrow order for 20,000 USDC (where ETHUSD = 2,000). This would not result in closing your 10 ETH lending position, but create a 20,000 USDC borrowing position against your 10 ETH lending position (as collateral, under portfolio margin).

Floating Rate Market

As the interest rate in floating rate markets are calculated every 12 seconds, entering the desired notional size with a greater than desired slippage (i.e. 0.10%) if the immediate order book depth is insufficient for the opposing side (e.g. you are a lender, you enter a borrow side order) would have a negligible effect (as compared with the fixed rate market) as you would only pay the (in case of a borrow order driving higher) the floating interest rate for 12 seconds, assuming there is sufficient depth in the order book to completely fill your desired notional size.

Fixed Rate Market

Infinity’s fixed rate market contracts span several expiry conventions, from one day to four quarters. Depending on the composition of your borrow and lend fixed contract positions, in order to close out certain token or maturity exposure, they would need to be cognisant of any “maturity mismatch” resulting from closing out and going flat your notional size with different maturity and expiry date.

For example, you execute a lending position on Monday 6 November using the 2W contract with a fixed maturity date of Friday 17 November. If they decide to close your lending position after one week (on Monday 13 November), prior to the contract’s maturity date, they would enter a borrow order using the 1W contract with a maturity date of Friday 17 November, and not the 2W contract (which would expire on Friday 24 November).

Note: all fixed rate contracts rollover or expire at the maturity date at 8am UTC.